Essays on Urban and Public Economics
This paper attempts to provide a theoretical and empirical analysis of important issues in urban and public economics. Chapter 1 notes that the Korean chonsei lease contract, in which the tenant provides a lump sum deposit equivalent to a large part of the housing value to the landlord for the contract period, is in effect a mortgage provided by the tenant to finance the landlord’s housing investment. I presents a model for deriving the size of the equilibrium chonsei deposit by incorporating the default risk of chonsei for the first time. Chapter 2 explores the stringency of floor area ratio (FAR), one of the land use regulations in New York, and analyzes it by borough of New York. In particular, I overcome issues in previous studies by constructing a data set using publically available data through new methods. The results show that the FAR stringency in Manhattan is the highest in New York City and the stringency is lower as the distance from the center of the city increases.
Chpater 3 analyzes the impact of receiving R&D grant on firms' receiving subsequent investment from venture capital (VC) using internal data of Korea's R&D grant program. We address sample selection and endogeneity issues that arise when estimating the impact of R&D policy through the matching method and instrument variable approach, respectively, using unique features of Korea's R&D grant programs. The results of our empirical analysis show that firms receiving R&D grants receive 10 to 15% less VC investment than firms that do not. Chapter 4 analyzes the impact of the financial costs of using innovation projects supported by government grants on firm's innovation project choice through game theory. Then, theoretical predictions are verified by using unique data. In particular, I utilize the quasi experimental environment brought about by the institutional characteristics of Korea's R&D grant program and estimate the effect of the cost difference faced by the firm on the type of innovation outcomes(product or process innovation) through the regression discontinuity design.